Friday, April 18, 2008

Recession, my foot! Lady luck still loves Google

Lady luck may have deserted the whole world. But she still smiles at Google.

Look at the stellar results. Google’s net income for the Q1-08 grew 30 percent, to $1.31 billion, or $4.12 a share, compared with $1 billion, or $3.18 a share, in the first quarter of 2007. Revenue climbed 42 percent, to $5.19 billion, from $3.66 billion a year earlier. The stock price soared to $535.

Excluding commissions paid to advertising partners, a widely followed measure, Google’s revenue was $3.7 billion, slightly higher than analysts expected – a rare occurrence by itself. Its profit, excluding the cost of stock options, was $4.84 a share, handily beating forecasts.

That’s the power of business model. Come inflation or recession, a robust business model could insulate the even the most vulnerable of businesses.

But I like recession for something else. It makes even the smuggest of breeds – marketers – to sit up and revisit their inherent deficiencies. Courtesy Swaminathan of Cequity, I was led to this CMO council study. Quite some candid admissions there. So unusual since CMOs don’t often own up and don’t skip a beat even while flying blind. If something goes wrong, they know it’s the client’s business that crash lands.

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